Reliance on advertising is often a way to mask the fact that a media property hasn’t found “product-market fit”.
To find success in any market, you need to offer a product that’s 1) compelling and 2) differentiated. A compelling product adds value to the consumer: it offers a functional benefit and/or emotional stimulation that they place value on. A differentiated product is something they can’t get elsewhere…the brand, the technology, the affordable price point, the geographic focus, or whatever else is fairly unique.
A product that’s differentiated but not compelling is just something no one wants – there’s no market for it. Alternatively, a product that’s compelling but not differentiated has no wedge to break into a market and no sustainable business. You have a commodity product so consumers will just go with whoever offers the same thing for cheapest or who they’ve already been buying from.
Entrepreneurs know they have a product that’s both compelling and differentiated when they receive consistent enthusiasm from customers willing to pay a sustainable price. So when an entrepreneur puts a product out and few people are willing to pay for it, it sends them back to the drawing board. They iterate until they finally find “product-market fit” or run out of money and stop.
In media, there’s a common opt-out here. Media entrepreneurs will produce content that’s compelling but not differentiated; there’s an audience but they’re not willing to pay for it. Rather than iterating to find product-market fit, they sing the common – but false – refrain that “people won’t pay for content anymore” and turn to advertising as a way to monetize the initial audience. It’s the fallback option. But in doing so they’ve moved out of media and into the advertising business…the attention business, the quantity-over-quality business. The content they produce gradually reflects this goal (see The Problem with Advertising). The problem is worst in news publishing, where – since the internet has removed mere geographic location as a differentiator – most publishers produce the same news stories without unique voice or analysis.
The reality is that if people won’t pay for your content it is, simply enough, because they don’t think it’s worth paying for. It doesn’t mean the content isn’t compelling, it might just not be differentiated from what can easily be found elsewhere. In the media industry, there’s not enough pressure to confront this reality and find product-market fit because advertising offers a short-term escape route.